A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.

What is a "Crack-Up Boom?" Von Mises explains (with thanks to Ty Andros for reminding us):

"'This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.'

"But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against 'real' goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.

"It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last."

Mises is describing the lunatic phases of a classic inflationary cycle.

At first, no one can tell the difference between a real dollar - one that is earned, saved, invested or spent - and one that just came off the printing presses. They figure that the new dollar is as good as the old one. And then, prices rise…and people don't know what to make of it. Later, they begin to catch on…and all Hell breaks loose.

You see, if you could really get rich by printing more currency, Zimbabweans would all be as rich as Midas, since the Mugabe government runs the presses night and day.

Can't help them sorry.Really though,if one is willing,go ahead and cut spending a little,learn some contract law,develope some patience(impulse buying),make better deals for yourselves,and be happy.Yes I could use some of my own advice.Nothing wrong with clipping a few sheep here and there too,just a little,so they don't get Paniced.

"Statistical Review of World Energy 2007:A look at British Petroleum’s Annual World Energy ReportPart I – General Overview"

http://tinyurl.com/bsbcz

And

"Statistical Review of World Energy 2007:A look at British Petroleum’s Annual World Energy ReportPart II – The Emergence of China on the Global Energy Scene and Implications for the U.S."

http://tinyurl.com/33o2z

I also recommend"The Coming China Wars" by Peter Navarro

Everyone is worried about Al Qaeda while the real danger will by China. China is laughnig all the way to the bank while they help us finance our war on terror which is draining us of money, oil and geopolitical capital. In the meantime, they're using their trade surpluses to buy up the natural resources of developing nations from Africa to Central and South America. We're getting our butts kicked and we don't even realize it. We'll find out soon enough.

Here's a GREAT BIG DOT----------TOKYO/DETROIT (Reuters) - General Motors Corp. on Tuesday posted a steeper-than-expected 24 percent drop in June sales, as U.S. automakers lost share to Japanese brands and overall vehicle sales sputtered in the face of high gas prices and a weak housing market.

Shares of GM dropped more than 4 percent after the holiday-shortened close of trade on the New York Stock Exchange in reaction to the sales shortfall and indications the largest U.S. automaker would have to respond with bigger discounts.

"The sales boost (for the Japanese brands) came from the big incentives spending," said Atsushi Kawai, auto analyst at Mizuho Investors Securities in Tokyo. He added he expected a gentle rise at top Japanese brands on average for the rest of the year.

Nissan's sales gained an industry-leading 18 percent, in what Kawai attributed to a sharp drop the year before when defects had forced the company to halt sales of the big-volume Altima and Sentra sedans.

Toyota's sales gained 6 percent, and Honda's rose 7 percent.

Ford Motor Co. sales were down 11 percent, while Chrysler's fell 5 percent. Both declines by the loss-making Detroit-based automakers were in line with cautious analyst expectations as the industry closed out a weak second quarter.

Industry-wide first-half sales were down 1.5 percent, although Toyota bucked the downtrend with a 9 percent gain over the six-month period. That put it ahead of Ford for the U.S. market's No. 2 spot as it outsold GM in passenger cars.

TOYOTA MUSCLES UP ON TUNDRA

In a sign of Toyota's new-found muscle, the Japanese automaker rattled Detroit by offering zero-percent financing and cash rebates on its all-new Tundra pickup truck in June.

That aggressive discounting caused sales of Toyota's new full-size truck to more than double in June, stealing share in the last U.S. market segment dominated by the Detroit Three.

"The bottom line was that it was a tough quarter and a first half that was weaker than we expected," said GM sales analyst Paul Ballew.

GM was the only major automaker to throttle back on incentive spending compared with May, according to industry data, and it paid the price.

Ballew said some of GM's shortfall could be attributed to lost sales as its own all-new Silverado truck went head-to-head against the heavily subsidized Tundra.

"What we saw in the month was beyond what we could have imagined," Ballew said, calling Toyota's margin-sacrificing sales strategy "a bit of a curveball."

Edmunds analyst Jesse Toprak said GM would have to respond with more aggressive discounts in order to avoid a pile-up of inventory at a time when automakers typically try to make room for upcoming models.

"This is a bit of a shock and I'm sure it's going to produce some new marketing thinking at GM," he saidg DOT for them.____________________________________________________________________ A Curveball? What a whinerLack of incentives? GM was losing it's sorry ass due to incentives in the first place,now they are losing their asses without them. 24% after similar numbers a year ago? Yeah the dots just don't fit in with a housing slide or credit crash on this one.Where's my goddamned tin Hat? This has been the longest streak of incentive selling by the big three ever,and it's not working.Now toyota is into incentives tooo,get it?Dot to dot to dot.

..............and those GM numbers are fudged to the upside,did anyone notice the coincidental release of their numbers on a shortened trading day just before a holiday.smart.Many will have to die to prop those boobs up.

Housing inventory. I read a story the other day about housing inventory being the highest since just after Sept. 11 acording to some metric which was started in 2000. It was featured prominently in the business section of google news. That story is very hard to find now -- anyone have a link? Or the name of the metric?

OK, to answer my own question, step one, find the computer I was using when I read that article (I use too many during the course of the day), step 2, look at history.

It wasn't inventory that was the highest, it was pending home sales that is the lowest:

http://www.tiny.cc/rlp5n

From the article dated yesterday:

An index of signed purchase agreements, or pending home resales, dropped 3.5 percent to 97.7, the lowest level in more than five years, from a revised 101.2 in April, the National Association of Realtors said today in Washington.

B) 9-11 was to get oil in mid east locked up so China and Russia could not get it.

C) the perps of 9-11 (zionist) have known of peak oil for decades.

D) the perps of 9-11 know that when oil peaks the global economy will crash

E) the perps of 9-11 want the global economy to crash to cause demand destruction - no cash - no gas

F) The perps of 9-11 also know that global population is beyond carrying capacity only made available because of the availability of cheap oil.

G) when oil peaks (and it has) not only will people not buy gas, but food will not be available - billions will starve

H) the perps of 9-11 want this to happen because they will usher in a new world order once the rug is pulled out from under them and the middle class will galdly give up the remnants of their personal freedoms for table scraps.

I) the only jobs in the future will be 1) energy production, 2) forced labor farming 3) waste (as in human bodies) disposal.

More dots - Apathy, unwillingness to adapt, status quo of constantly expanding government and willingness to let government take care of us from birth to grave, getting as many people addicted to the government teat as possible ensures votes and maintenance of status quo.

Its been said before but its worth repeating. This disaster will be many factors worse than the Dotcom blow up.

What especially troubles me is Peak Oil. The sheeple have been brainwashed into thinking the earth is hollow and full of oil so we continue to drive tanks on the road. Absolutely no regard for conservation.

Our society is driven on entitlement and live for today mentality. The future?, WHO CARES, I'LL BE DEAD.

Here in downtown SD, if you know 10 people, you know 6 REALTORS(tm). . .some are actually nice people - but what they all have in common is that they are very clueless, and not well educated (in any sense of the word). . .they don't seem to read a decent paper, don't know much about economics, and when I talk about "credit contraction," "central banks draining liquidity", or CDO's, you would think I was speaking French. They still think the "market will come back soon" and that "now is a great time to buy.". . . what is worse, they are drinking their own KoolAid(tm). . .one told me that since there are a number of units selling "below developer prices" (still WAY overpriced) he is going to "invest" now. (although I thought the word invest means buying something that will gain in value - silly me).

I told one of them, "don't try to catch a falling knife". . .and old Wall Street saying, and he didn't understand the reference - I explained - buying Cisco at 45 when it had been 90, but before it went to 10!!! (now only 27). . .then the lights went on. . .

[you left out neocons, who are mostly communist jews who switched parties since they figured the democrat liberal thing was not going to help them in their quest.]

Ultimately the neocons, communist jues, and democrat liberals are all of the same cloth: They want power over others. Some believe they are "doing good". Some pay lip service to it in their quest for power. Regardless, they all eventually lead to tyranny.

The founding fathers understood. The entire Constitution was designed to prevent power from consolidating.

you forgot out of control consumer debt. no savings and the crash of auto industry. you may have forgotten nothing is made in america anymore except of course overpriced drugs. the big mac does not count.

What about Putins claim to all the mineral resourses at the north pole that includes 10 times more oil than Saudi Arabia, and the land/sea ownerhip dispute with CANADA/OSA, and the environmental theif/regulators of the U.N

Claims to massive oil deposits are ultimately meaningless. Will the Russians have the rigs to drill and pump deep water oil? There's a major shortage of rigs and with the price of industrial metals skyrocketing (thanks to China) that shortage isn't going to end anytime soon. Furthermore, assuming they can pump significant amounts of oil out of the Arctic, will it compensate for production declines elsewhere much less increase global production numbers? And assuming it does increase production, will it keep up with growing Asian demand? Finally, what will be the cost of pumping that oil. The major problem for the world economy is not running out of oil, it's running out of cheap oil.

Is there anybody on this blog or the net in general that thinks everthing is going to be all right? Oh, by the way, I noticed where Ford is offering 0% financing even on their Mustang Shelby. I thought that was their "hot" item.